Moodys Downgrades GM, GMAC Debt

The credit rating firm Moody's downgraded the debt of GM and its lending subsidiary GMAC. The move was not unexpected. "Moody's Investors Service lowered the long-term and short-term ratings of General Motors Corporation, and also lowered the long-term rating of General Motors Acceptance Corporation. The rating outlook for both companies is negative."

"Approximately $200 billion in debt affected." With the GSE situation unfolding, the credit markets must be on edge. The service expects GMAC could survive even if GM doesn't. "GMAC might avoid bankruptcy in the event of the parent's filing. Moody's also believes that it is very likely that GMAC would be able to maintain its separate corporate identity."

"GMAC, a wholly-owned subsidiary of GM..is one of the world’s largest non-bank financial institutions."